29 October 2021
RMT Press Office:
RMT reveals that the Government handed fees to the private train operators equivalent to nearly 7p in every pound spent by rail passengers during the first year of the pandemic.
RAIL UNION RMT today revealed that for the first year of the Covid-19 pandemic, the Government gave the private train operators over £150m in fees for profits which the Union estimates to be equivalent to nearly 7p of every pound spent by rail passengers during the same period.
Under the terms of their Covid-19 Emergency Measures Agreements and Emergency Recovery Measures Agreements the private train operators receive fees, that can be used to fund profits. The latest figures quietly published by the DfT show that from March 2020 – March 2021, the private train operators in England received £154m in fees.
Despite its continued support for the big business train operators, the Government is subjecting rail workers, who were on the frontline throughout the pandemic, to a pay freezes and passengers to fare rises. RMT calculates that the money paid to the private companies for the first year of the pandemic could instead have easily funded an inflation level pay rise for rail workers and allowed millions more to be reinvested in improving the rail network for passengers.
General Secretary Mick Lynch said:
“It is nothing short of a scandal that for the first year of the Covid-19 pandemic the Government handed the private rail operators fees which can be used to fund profits equivalent to nearly 7p of every pound spent by rail passengers during the same period. These payments include nearly £16m for disgraced operator Southeastern that has since been stripped of the franchise due to a serious contract breach.
“This pandemic profiteering has happened while rail workers have faced pay freezes and passengers fare hikes. If the Government is serious about meeting its climate change targets then it needs to end the private profiteering scandal of our railways. Rather than handing millions to fund the profits of the big business operators, the Government should be investing in its key worker staff and in improving and expanding the rail network.
“We need a sustainable, affordable and accessible rail network that that works for passengers, not profit. That’s why, next week, RMT will be protesting outside the DfT as the Government hosts an event for the private operators who will be guaranteed profits under the new Passenger Service Contracts.”
Notes for editors
• The fees paid to the rail operators are available here - https://www.gov.uk/government/publications/dft-payments-to-passenger-rail-operators-under-emergency-agreements
• DfT data on transport usage during Covid show that national rail usage averaged 22% of pre-Covid levels in the year to March 2021 - https://www.gov.uk/government/statistics/transport-use-during-the-coronavirus-covid-19-pandemic
• The latest ORR data reports that during 2019-20 franchised operator passenger income in England was £10.48bn - https://dataportal.orr.gov.uk/statistics/finance/rail-industry-finance/table-7210-uk-rail-industry-finances-over-five-years-by-country-and-nr-region/. Based on this figure, RMT estimates that passenger revenue for the year to March 2021 was £2.3bn.
• £154m is 6.7% of £2.3bn.
• RPI inflation was 1.5% for the year to March 2021 - https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23
• Staff costs for the franchised train operators in England in 2019-20 were £3.1bn (https://dataportal.orr.gov.uk/statistics/finance/rail-industry-finance) and Network Rail staff costs were £2.7bn (https://www.networkrail.co.uk/wp-content/uploads/2020/07/Annual-report-and-accounts-2020.pdf). A pay rise equivalent to RPI in March 2021 would have cost c£87m.
• RMT is demonstrating on 4th November 2021 outside the Department for Transport, commencing at 10am – full details here - https://www.rmt.org.uk/news/events/cut-carbon-emissions-not-public-transport-jobs/